After threatening for months to end billions of dollars in payments promised to health insurers, President Trump finally dropped the ax with timing that could inflict maximal disruption on the Affordable Care Act enrollment season scheduled to begin in two weeks.
The most immediate upheaval is playing out in a set of states where regulators had ignored the risk that the president might carry out his threat and told insurers not to include any cushion in their 2018 rates for ACA health plans. Officials in at least three states are now debating whether to delay the Nov. 1 start of enrollment as they rush to consider higher premiums to make up for the abrupt loss of federal money.
But even in states that prepared for a possible cutoff of the "cost-sharing reduction" payments, Trump's action so close to the fifth year's sign-up period is sowing widespread confusion among consumers, according to leaders of insurance exchanges and enrollment-assistance organizations around the country. Along with other steps the White House has taken since late summer to undercut the ACA marketplaces, they predict this latest move is almost certain to suppress the number of Americans insured under the law next year.
"The timing couldn't be worse," said Allison O'Toole, chief executive officer of MNsure, the marketplace Minnesota created under the ACA. Hundreds more consumers than usual have phoned its call center in recent days, uncertain whether they can still get and afford health plans.
"Will the [president's] drumbeat of 'it's a failing marketplace' affect enrollment? Absolutely," said Peter V. Lee, executive director of Covered California, which calculates that the payments' end will cost its 11 marketplace insurers $188 million for the last three months of 2017 — more than the small profits many were anticipating for the year.
Insurers themselves could compound the damage, depending on how they respond. The Trump administration's timing meant its announcement late Thursday came after the deadline for insurers in three dozen states relying on the ACA's federal insurance marketplace to sign government contracts and lock in their rates for 2018 coverage. But a clause in the contracts lets insurers pull out within 90 days if the payments stop.
So far, no insurers have said they would defect. But concerns remain acute. As the number of companies selling ACA coverage has dwindled in the past two years, an increasing number of the nation's counties have found themselves with just one participating insurer. Scores of counties recently appeared as if they would lack any insurers until state officials lured in replacements. If more leave this fall, states would have difficulty attracting others on such short notice.
"It seems entirely possible that some insurers will now exit the marketplace for 2018 and potentially leave bare counties," said Larry Levitt, senior vice president of the Kaiser Family Foundation, a health policy organization.
The late changes in insurance rates, deterrence of would-be customers and potential unavailability of ACA coverage are the biggest ground-level effects of the president's decision — a step so strident that health policy wonks for months had made a parlor game out of debating whether the president would have the nerve to do it.
The federal payments have been the more obscure of two types of subsidies created by the sprawling 2010 health-care law to help Americans afford coverage if they cannot get such benefits through a job. The better-known subsidies help lower the monthly premiums owed by nearly 85 percent of the roughly 10 million Americans with ACA coverage.
The CSRs, as they are called, provide discounts for deductibles and other out-of-pocket insurance expenses to people with somewhat lower incomes — up to 250 percent of the poverty line, or about $30,000 for a single person and $61,000 for a family of four. Under the law, ACA health plans must continue those discounts. Trump's move means that health plans will not be reimbursed for the last three months of the year or in the future. The payments had been expected to total $7 billion for 2017.
Dramatic as it is, the payments' elimination does not go nearly as far as Trump and most congressional Republicans have sought this year as they attempted unsuccessfully to rewrite federal health-care law. Still intact is the ACA's requirement that most Americans carry health coverage, though administration officials have hinted they may stop penalizing people who violate that mandate. Other consumer protections in the law still guarantee specific benefits in insurance sold to individuals or small businesses, forbid insurers to charge more or refuse to cover people who have had medical conditions, and ban yearly or lifetime limits on coverage.
Hours before the White House announced the end of the CSRs, the president took another significant step that could foster a proliferation of insurance capable of making end runs around such protections. Under an executive order that Trump signed on Thursday, federal agencies will develop new rules to widen access to "association" health plans and short-term insurance policies — both exempt from the ACA's insurance regulations — and allow more policies to be sold from one state to another without meeting each state's regulations.
As state officials prepared in the spring and summer for the upcoming enrollment period, most instructed insurers either to include a surcharge assuming the federal cost-sharing would end or to file two sets of rates as a Plan A and Plan B.
In Colorado, one of the states that asked for two sets, the insurance commission approved the higher rates on Friday. The state's marketplace, Connect for Healthy Colorado, is now scrambling to load the necessary information into its computer system, according to Kevin Patterson, its chief executive. Colorado wants to start enrollment on time, Patterson said Saturday — but he is not yet sure whether it will be ready.
In Washington state, Insurance Commissioner Mike Kreidler also told insurers to file two rates. "In order to get the smoke to clear," he said, the marketplace there "may consider holding back on when" enrollment begins.
Maryland is in worse shape, because the two insurers in its marketplace were told by regulators to file only rates that assumed the CSR payments would continue. Chet Burrell, chief executive of CareFirst BlueCross BlueShield, said officials asked state insurance regulators Friday to allow it to submit new rates — about 20 percent higher — to make up about $50 million it had been expecting in CSR money next year.
Maryland's open enrollment, Burrell said, might need to be delayed.
At the Missouri Association of Area Agencies on Aging, executive director Catherine Edwards acknowledged the challenges. "It's just another hurdle that we're going to have to get over," she said Saturday. "We're just holding our breath to see what this does to the people coming to us."
Carolyn Y. Johnson contributed to this report.